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Thursday, April 23, 2015

Americans, Led by Democrats, Get Friendlier With Free Trade

I've pointed out in the past that Americans tend to be less supportive of international trade than other high-income countries of the world, and high-income countries tend to be less supportive of trade than lower-income countries. Of course, foreign trade (as measured by export/GDP ratio, for example) is relatively less important in the US economy, with its enormous internal markets, than in most other countries around the world. Thus, a working hypothesis would be that countries with lower incomes and/or more exposure to foreign trade are more likely to see it in overall positive terms.

However, a recent Gallup poll conducted in February suggest that although Americans became more likely to see trade as a "threat" than as an "opportunity" from about 2001-2008, since the Great Recession of 2007-2009, a rising share of Americans have started to viewing foreign trade as an opportunity. Here's a graph from Gallup:

Interestingly, the Gallup poll also suggests that the rise in Americans support for foreign trade has been driven mostly by a shift toward in the pro-trade beliefs of (self-described) Democrats and Independents, not a shift in the beliefs of Republicans. Indeed, Gallup finds that Republicans were more likely than Democrats to see trade as an opportunity in the early 2000s, but now Democrats are more likely to hold such beliefs.

I welcome the overall shift toward a more positive view of foreign trade among Americans. As I've argued on this blog before, the next few decades seem likely to be a time when the most rapid economic growth is happening outside the high-income countries of the world, and finding ways for the US economy to connect with and participate in that rapid growth could be an important driver of US economic growth in the decades ahead. In a broad sense, US attitudes over foreign trade mirror the behavior of the US trade deficit: that is, when the US trade deficit was getting worse in the early 2000s, the share of those viewing trade as a "threat" was rising, but at about the same time that the US trade deficit started declining, the share of those viewing trade as an "opportunity" started to rise.

However, I feel considerable uncertainty over how to interpret these findings. For example, it's not clear to me why Democrats and Independents are shifting their opinions about trade more strongly than Republicans. This shift doesn't seem to reflect the political divisions in Congress, where it seems that Republicans are more often the ones to be pushing for agreements to reduce trade barriers and Democrats are more likely to be opposing them.